Canadian Retailer - Summer 2015 - 12

REtail: at issUE

retail CounCil of CanaDa
ensuring that the voiCe of
the inDustry is hearD
KARL LITTLER, Vice-President Provincial GR and Strategic Issues and STEVE NIKIFORK
EnhancEMEnts to the Code of Conduct for the Credit
Card and Debit Card Industry in Canada have been released. Retail Council of Canada (RCC) was a driving
force in the creation of the initial Code ("1.0") in 2010,
and has worked tirelessly since then on these vital updates as a vocal member of the Finance Canada Payments Consultative Committee.
The focus of Code 1.0 was to reduce the average interchange rate paid by merchants to 1.5% (a 10% reduction)
effectively reversing the increasing trend which began
in 2008. The Enhanced Code provides merchants with
three additional benefits:
1. Choice - New rules for contactless payment,
particularly mobile payment, allowing merchants
to choose whether or not to accept contactless payment, whose products to accept,
and to choose between different
payment types that may carry
different costs.
2. Savings - Ensuring the esti1
mated $2 billion in savings from
network reductions in interchange are fully passed on to
merchants; and,
3. Protection - Greater clarity in
statements, and better rules for
contract termination, as well
as a new process to resolve any
disputes that might arise.

Ensuring customer preference with Mobile wallets

The Enhanced Code requires separate payment applications ("applets") for each debit and credit payment
option within a mobile wallet. These applets must be uploaded individually and appear separately. The choice
of whether or not to accept network debit or credit products remains with the merchant.
It also requires that all payment applets in a mobile
wallet be clearly identifiable and equally prominent, ensuring that where Interac is present, it is not crowded out
by larger or flashier network credit or debit offerings.
Finally, the Enhanced Code ensures that a customer
using a mobile wallet can set his or her own payment
preferences, and is able to move easily between payment options at point-of-sale.

BUT WHAT DOES IT REALLY MEAN FOR MERCHANTS?

CHOICE

Merchant acceptance of contactless payment

The Enhanced Code ensures that a merchant that
chooses to accept a network's credit payments from a
mobile device is not required to accept debit payments
from that network, and vice versa.
Merchants cannot be required to accept contactless
payments at point-of-sale or to upgrade terminals to enable contactless payment. And, if a merchant does choose
to accept contactless payment, the merchant may, with
thirty days' notice, cancel without financial penalty.
Even if the merchant's POS terminal is physically able
to accept contactless payment, it does not mean the merchant must by default accept contactless payment; merchants must give their express consent.
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canadian REtailER | Summer 2015

SAVINGS

PROTECTION

Ensuring Reductions in interchange Rates are passed
on to Merchants

On November 4, 2014, Visa and MasterCard agreed to
reduce their interchange rates on consumer credit cards
to an average of 1.5%. The Enhanced Code ensures that
these savings are passed on to merchants by:
1. Requiring networks to incorporate the Code into
all of their existing and future contracts, rules, and
regulations with their participants, including issuers (banks), acquirers (processors), etc.
2. Networks are required to ensure that all of their
participants do in fact comply with the Code; and,
3. If an acquirer does not pass through the full interchange savings, a merchant has the right, with 90days' notice, to cancel their contract without penalty.

Canadian Retailer - Summer 2015

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